R v Johnstone (Robert Alexander)

JurisdictionEngland & Wales
CourtHouse of Lords
Judgment Date22 May 2003
Neutral Citation[2003] UKHL 28
Date22 May 2003

[2003] UKHL 28


The Appellate Committee comprised:

Lord Nicholls of Birkenhead

Lord Hope of Craighead

Lord Hutton

Lord Rodger of Earlsferry

Lord Walker of Gestingthorpe

(Respondent) (On appeal from the Court of Appeal (Criminal Division))

My Lords,


Counterfeit goods and pirated goods are big business. They account for between 5% and 7% of world trade. They are estimated to cost the economy of this country some £9 billion each year. Counterfeit goods comprise cheap imitations of the authentic article, sold under the trade mark of the authentic article, as with imitation 'Rolex' watches. Pirated goods comprise illicit copies of the authentic article which are not sold under the trade mark of the authentic article. This would happen, for instance, when a person makes and sells unauthorised copies of computer software which is the subject of copyright. Thus, in the context of music recordings, a counterfeit compact disc is an unlawful copy of, say, a Virgin compact disc sold ostensibly as a Virgin product. A pirated compact disc is an unlawful copy of, in my example, a Virgin compact disc which is sold, not as a Virgin product, but under a different brand name.


Another type of unlawful trading is 'bootlegging'. Like counterfeit records and pirated records, bootleg records are also big business. They comprise copies of an unlawful recording of a performance at a live concert. The recording is made at an auditorium or taken from a radio or television broadcast.


Most bootleg products sold in this country are in compact disc format. They are mainly manufactured abroad and imported into this country without cases or paperwork. The importer then packages the discs, with created paperwork, into locally obtained cases.


So it was with the subject matter of the present appeal. The present appeal relates to copies, in the form of compact discs, of bootleg recordings made of performances by well known performers. The case concerns the use, in connection with these compact discs, of the criminal sanctions contained in the trade marks legislation. Questions about trade marks arise in this context in the following way. When sold to the public each of these compact discs bears, in the usual manner, the name of the performer whose performance is recorded on the disc: Rolling Stones, or Beatles, or whoever it may be. This name also appears on the accompanying paperwork inside the disc's case. Nowadays leading performers register their professional names as trade marks in respect of recordings. So, it is said, sales of the discs labelled in this way constitute infringements of the performers' registered trade marks.


The case arises out of the 'bootlegging' activities of Mr Robert Johnstone, the respondent to this appeal. His activities only came to light because of a misdirected parcel. Mrs Luddington lives in Hemel Hempstead. In October 1997 she was surprised to receive a large box. It contained 519 compact discs and associated artwork. The box had been mistakenly posted to her by Mr Johnstone from his home address in New Malden. Mrs Luddington notified Polygram Records, whose head of security retrieved the box and contacted the police.


Police officers then searched Mr Johnstone's home. They were accompanied by a representative of the trade body, British Phonographic Industry. Some 500 compact discs and audio cassettes were seized during the search. The investigator from BPI considered that most of the compact discs found, as well as those sent by error to Mrs Luddington, were bootleg recordings. Mr Johnstone was charged with having committed criminal offences under section 92 of the Trade Marks Act 1994 ('the 1994 Act').

The statutory provisions


Before elaborating further, and in order to explain the point of law which has arisen, I should refer briefly to the relevant statutory provisions. Part I of the 1994 Act concerns registered trade marks. Section 1 defines a trade mark as any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings. A trade mark may consist of words, including personal names. The proprietor of a registered trade mark has the rights and remedies provided by the Act: see section 2.


Sections 9 to 13 comprise a fasciculus of sections setting out the effect of a registered trade mark. Section 9(1) provides that the proprietor of a registered trade mark has the exclusive rights in the trade mark 'which are infringed by use of the trade mark in the United Kingdom without his consent'. The acts amounting to infringement if done without the consent of the proprietor are stated in section 10.


Section 10 deals with several different situations. Section 10(1) concerns the case where a person in the course of trade uses a sign identical with a registered trade mark in relation to goods identical with those for which it is registered. Such use constitutes infringement:

'(1) A person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered.'


Section 10(2) addresses cases where either (a) a sign identical with a registered trade mark is used in relation to goods similar to those for which the trade mark is registered or (b) a sign similar to a registered trade mark is used in relation to goods identical with or similar to those for which the trade mark is registered. In such cases user constitutes infringement if there exists a likelihood of confusion on the part of the public. Section 10(3) concerns cases where a sign identical with or similar to a registered trade mark is used in relation to goods not similar to those for which the trade mark is registered. Then, in short, user constitutes infringement where the trade mark has a reputation within the United Kingdom and the sign takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.


One of the ingredients of infringement as described in section 10(1) to (3) is the 'use' of a sign by a person. Section 10(4) gives some examples of what this means. A person uses a sign if he affixes the sign to goods or its packaging, or if he offers goods for sale under the sign.


Section 11 specifies some limits on the effect of a registered trade mark. Section 11(2) provides:

'(2) A registered trade mark is not infringed by -

(a) the use by a person of his own name or address,

(b) the use of indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services, or

(c) the use of the trade mark where it is necessary to indicate the intended purpose of a product or service (in particular, as accessories or spare parts),

provided the use is in accordance with honest practices in industrial or commercial matters.'

Trade mark use: indication of trade origin


The message conveyed by a trade mark has developed over the years, with changing patterns in the conduct of business: see the discussion in Scandecor Developments AB v Scandecor Marketing AB (4 April 2001, UKHL 21 of 2001). But the essence of a trade mark has always been that it is a badge of origin. It indicates trade source: a connection in the course of trade between the goods and the proprietor of the mark. That is its function. Hence the exclusive rights granted to the proprietor of a registered trade mark are limited to use of a mark likely to be taken as an indication of trade origin. Use of this character is an essential prerequisite to infringement. Use of a mark in a manner not indicative of trade origin of goods or services does not encroach upon the proprietor's monopoly rights. Dillon LJ observed trenchantly in Mothercare UK Ltd v Penguin Books [1988] RPC 113, 118:

'it stands to reason that a Trade Marks Act would only be concerned to restrict the use of a mark as a trade mark or in a trade mark sense, and should be construed accordingly. If descriptive words are legitimately registered [as a trade mark], there is still no reason why other people should not be free to use the words in a descriptive sense, and not in any trade mark sense.'

In this regard I cannot forbear adding the extreme hypothetical example beloved of trade mark lawyers. If a magazine publisher were to register an ordinary question mark, '?', as a trade mark for magazines this would not prevent the grammatical use of question marks on the covers of other magazines.


This fundamental principle, limiting the scope of the rights of the proprietor of a registered trade mark, was well established under the early trade marks legislation. It was carried forward expressly into section 4(1)(a) of the Trade Marks Act 1938 ('being used as a trade mark'). Section 4(1)(b) muddied the waters a little. The wording of section 4(1)(b) gave rise to an unresolved controversy over whether, and to what extent, this paragraph further extended the rights of a proprietor: see the discussion in Kerly's Law of Trade Marks, 12th ed, (1986), pp 263-265 and the authorities cited there. This controversy is now of no more than historic interest.


Against this background I turn to the 1994 Act. Section 10(1) to (3) specifies the acts which constitute infringement, but there is no express statement that the offending use must be use as a trade mark. I would not regard this as sufficient reason to suppose that Parliament intended to depart from such a basic principle. But on this, as so much else in the law of trade marks, it is necessary to look for guidance beyond the...

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